Alternative political/cultural commentary from an historical New Left working-class counter-cultural perspective.

Sunday, February 25, 2018

In The Pay of Foundations: How U.S. power elite foundations fund a `parallel left' media network--Part 8

Gave Pacifica $23,000 To Help Fund Democracy Now! in 1990s

In The Pay of
Foundations—Part 8

How U.S. power elite and liberal
establishment foundations fund a “parallel left” media network of left media
journalists and gatekeepers.

After the then-NY Daily News owner who employed one
of the Democracy Now! show’s co-hosts for over two decades expressed
his support, in a late 2008 television interview, for using public funds to
bail out the Wall Street banks, whose involvement in unethical subprime
mortgage lending helped trigger the Great Recession of 2008, Wayne Barrett
noted, in a Nov. 25, 2008 Village Voice article, that “when
Zuckerman isn’t running his media properties…he’s the chairman of Boston
Properties, the largest office real estate company in the country;” and “that
Citigroup rents more than a million square feet from Zuckerman’s company —
trailing only the federal government and Lockheed Martin on its list of top 20
tenants.” So one reason Mort Zuckerman argued on television that “we cannot allow a
major institution like” Citigroup “to collapse,” and his NY Daily News newspaper
argued in an a November 2008 editorial that the U.S. government should “prevent
major banking houses like Citigroup from collapsing,” was apparently because
the commercial rental income that Zuckerman’s real estate dealmaking firm
gained from its Citigroup tenant would be lost if Citigroup, despite having
made $300 billion in unethical “toxic” subprime mortgage-related loans, was
allowed to collapse, according to Barrett’s Voice article.

When Zuckerman had purchased his NY Daily News newspaper
in 1993 for $36.3 million [equal to over $64 million in 2018], his personal
worth was then $265 million [equal to over $468 million in 2018]. And during
the 20 years that the weekly salary of the part-time co-host of the “parallel
left” Democracy Now! show was being provided by Zuckeman’s tabloid
corporate newspaper, Zuckerman’s personal wealth increased to around $2.8
billion by early 2018. But, not surprisingly, not many news segments examining
how Zuckerman, who also sat on the board of trustees of both NYU and New York
City’s WNET-TV affiliate of PBS during these two decades, was accumulating more
personal wealth through his commercial real estate dealmaking firm while the
gentrification of the Big Apple intensified, were apparently aired or broadcast
on a sustained, regular basis by the Democracy Now! producers during
these two decades. Yet in just the one year alone of 1999, the gross profits of
the NY
Daily News owner’s Boston Properties’ firm jumped by 50 percent.

After moving into his NY Daily News office in early 1993,
Zuckerman immediately “fired 180 out of 540 members of the Newspaper Guild” at
the NY
Daily News, “axed two-thirds of the African-American reporters,
including all Black males,” and “dismissed [the now-deceased] veteran reporter
Dave Hardy, who was one of the Black journalists who won a racial
discrimination suit against the newspaper in 1987” when it was still owned by
the Tribune media conglomerate, according to the Daily News Workers
Campaign for Justice. So, not surprisingly, the Daily News Workers
Campaign for Justice then urged people in New York City to boycott Zuckerman’s NY
Daily News in 1993. Yet one of the “parallel left” Democracy Now! show’s
co-hosts continued to work as a columnist for Zuckerman’s newspaper until 2016;
in the year before Zuckerman, a Canadian immigrant, who didn’t become a U.S.
citizen until he reached the age of 40 in 1977, finally sold the NY
Daily News in September 2017, while still continuing to own his U.S.
News & World Report corporate media outlet.

A year after the Carnegie Corporation of New York gave
Pacifica the $25,000 grant in 1996 to launch the Democracy Now! show, the
J.M. Kaplan Fund foundation, in 1997, gave Pacifica a $13,000 [equal to over
$20,000 in 2018] to “support Democracy Now! show;” and in 1998 an
additional $10,000 [equal to over $15,000 in 2018] grant to help fund Democracy
Now! was given to Pacifica by the J.M. Kaplan Fund foundation. And, not
surprisingly, few radio or cable tv segments examining either how the J.M. Kaplan
Fund’s founder obtained the money he needed to establish his foundation or how
the J.M. Kaplan Fund historically acted as a conduit for the Central
Intelligence Agency [C.I.A.] during the Cold War era were aired by Democracy
Now! during the last two decades.

Yet as U. of California-Santa Cruz Professor G. William
Domhoff noted in his 1970 book The Higher Circles: The Governing Class in
America:

“The CIA did not
exhaust its labor organizing efforts with its involvement in unions and
training organizations related to the AFL-CIO. It also speculated in the
activities of the `democratic left.; Through the J.M. Kaplan Foundation, which
was founded originally through the beneficence of the president of Welch Grape
Juice Company, the CIA gave $1,048,940 between 1961 and 1963 to socialist
Norman Thomas’ Institute of International Labor Research…”

In a Sept. 3, 1964 article, titled “Kaplan Fund, Cited as
C.I.A. `Conduit,’ Lists Unexplained $395,000 Grant,” the New York Times also
observed:

“Charges that the J.M.
Kaplan Fund Inc. of 55 Fifth Avenue has acted as a `secret conduit’ for
transmission of funds abroad for the Central Intelligence Agency has met a wall
of silence at the fund.

“A copy of the report
made by the Kaplan Fund…for 1963, however, shows an unexplained grant of
$395,000 [equal to over $3.1 million in
2018] for that year to an Institute operated by a man who has long been
identified with anti-communist causes in Europe and Latin America. The grant
was by far the largest made by the Kaplan Fund last year in a total of
$1,645,390 [equal to over $13.2 million in 2018].

“The recipient of the
$395,000 was the Institute of International Labor Research Inc….Its secretary-treasurer
is Sacha Volman…For years in Paris he headed a group called Free Trade Unions
in Exile that worked with underground anti-communist forces in Eastern
Europe…Norman Thomas is listed as chairman of its board of directors…Mr. Volman
denied by telephone from Washington last night that he knew of any C.I.A.
connection…It was his recollection that the fund had also made grants in 1960,
1961 and 1962…

“The charge that the
New York…organization was being used as a `secret conduit’ for C.I.A. funds was
made…by Representative Wright Patman…The Kaplan Fund has been under
investigation both by the House and by the Internal Revenue Service. Mr. Patman
had charged the fund with using some of its monies in business operations…”

In his 2012 book, Philanthropy In America: A History,
University of Virginia Commonwealth Professor of History Olivier Zunz (who was
“grateful also for the support” he “received from the W.K. Kellogg Foundation
and the Charles Stewart Mott Foundation”—while writing a book about foundations
like the ones supporting him) indicated why Rep. Patman initiated his
Congressional investigation of foundations like the J.M. Kaplan Fund in the
1960s:

“Patman pursued his
investigation of foundations throughout the 1960s. He argued that the proliferation
of foundations was evidence not of increased…generosity but rather of growing
fiscal abuse, which removed `over $11.5 billion [equal to over $91.9 billion in
2018]’ from taxation. He was determined to expose philanthropy as yet another
pretext the wealthy used to avoid inheritance taxes, keep control of companies
from one generation to the next, and receive handsome tax deductions when
dumping unwanted assets. He also believed philanthropy was a means to avoid
antitrust legislation, hide dubious financial transactions from scrutiny and
influence the public through the funding of media…Patman was…the first person
to reveal that the CIA had been using private foundations as fronts to channel
money to anti-communist activities in Europe…Embarrassed, the White House
quickly pressured the congressman to abandon that part of his investigation…”

The J.M. Kaplan Fund that gave Pacifica $23,000 in grant
money in 1997 and 1998 to help fund Democracy Now! was established in
1945 by a former New School for Social Research/New School University board of
trustees chair and former Freedom House trustee named Jacob “Jack” Kaplan, who
lived between 1893 and 1987; and “much of its asset base came from the sale in
the 1950s of the Welch Grape Juice Company, long headed by Mr. Kaplan, to a
grape growers’ cooperative in New York State and Pennsylvania,” according to
the J.M. Kaplan Fund’s website. From the sale of his Welch Grape Juice Company
corporate stock in 1956, for example, Kaplan received $28.5 million [equal to over
$259 million in 2018].

A historical profile of Kaplan’s company posted on the
fundinguniverse.com website recalled how the Kaplan Fund’s founder increased
the Welch Grape Juice Company’s profits during World War II and first gained
control of the Welch Grape Juice Company:

“…Jacob `Jack’
Kaplan…had garnered…a multi-million dollar fortune in commodities trading and
retailing in the early 20th century. In 1933, Kaplan and his brother
Maurice [purchased]…the grape processing operation of the Chautauqua and Erie
Grape Growers Cooperative (CLE) in Brockton, New York…He changed the company
name to National Grapes Corporation [in 1939]…In order to circumvent wartime
restrictions on corporate profits and price controls, Jack Kaplan spearheaded
the creation of a large grape growers cooperative in 1945. The new organization
would not only be immune from federal corporation taxes and pricing dictates,
but would also guarantee his processing company a reliable supply of
grapes…Kaplan and his team convinced 900 growers to join the newly formed
National Grape Co-Operative…Jack Kaplan purchased a controlling interest in
[Welch’s parent] company [American National]…By the mid-1950s, National Grape
farmers—whose numbers had swollen to over 6,000 in the meantime—were supplying
90 percent of the grapes processed by Welch…”

According to Frances Stoner Saunders’ 1999 book, The
Cultural Cold War: The CIA and the World of Arts and Letters book, the
same year that Kaplan sold his Welch Grape Juice Company stock for the $28.5
million, from which much of the J.M. Kaplan fund’s asset base was derived, he
secretly offered his services to the Central Intelligence Agency. As The
Cultural Cold War recalled:

"In 1956...J.M.
Kaplan, president of the Welch Grape Juice Company, and president and treasurer
of the Kaplan Foundation (assets: $14 million), wrote to Allen Dulles offering
his services...Dulles subsequently arranged for a CIA `representative' to make
an appointment with Kaplan. The Kaplan Foundation could soon be counted as an
asset, a reliable `pass-through' for secret funds earmarked for CIA projects,
amongst them the Congress for Cultural Freedom, and an institute headed by
veteran socialist and chairman of the American Committee for Cultural Freedom,
Norman Thomas.”

In the 21st-century, the J.M. Kaplan Fund, that
helped fund Pacifica’s Democracy Now! in late 1990s, was
still controlled by members of Jack Kaplan’s family (whose last names were now
more frequently “Davidson” or “Fonesca” rather than “Kaplan,” as a result of
marriage by Kaplan’s daughters, including the oldest one, Joan Davidson, who
still owned an 85-acre estate in Germantown, New York in 2013). In 2010, for
example, eleven grandchildren, children or other relatives of Kaplan were each
being paid between $4,000 and $9,000 for only 3 to 5 hours of “weekly
work” sitting on the J.M. Kaplan Fund board of trustees, according to the
foundation’s Form 990 financial filing for 2010. And in 2016, Kaplan’s
surviving children and grandchildren were now being paid between $5,000 and
$10,000 for only 3 to 5 hours of “weekly work” sitting on the J.M.
Kaplan Fund’s board, according to the Form 990 financial filing for 2016.

The market value of the J.M. Kaplan Fund’s assets in 2010
still exceeded $139 million, including its investments of over $72 million in
limited partnership shares, over $56 million in corporate stock and over
$800,000 in corporate bonds. Over $16 million of the foundation’s inherited
wealth was now invested in Westgate Associates, over $13 million in Brookside
Capital and over $8 million in Emerging Markets Growth Fund, for example, by
the J.M. Kaplan Fund; and the dividends and interest obtained from the
corporate securities owned by the “non-profit” foundation produced a net
investment income of over $2.1 million in 2010.

In 2010, the J.M. Kaplan Fund apparently used some of the
money it obtained from investments in corporations that exploit working-class
people and middle-class consumers around the globe to provide “charitable
grants” to U.S. university book publishing firms like Princeton University
Press, University of North Carolina Press and Penn State University Press, as
well as to “parallel left” publishers like The New Press (which was given a
$5,000 grant “for `The World According To Monsanto’), according to its 2010
Form 990 financial filing.And during
that same year, the “non-profit” J.M. Kaplan Fund paid $459,000 to Brandywine
Management Services “for investment services” (of apparently speculating with
the foundation’s money on stock markets around the globe) and paid a total
annual compensation of over $291,000 to the J.M. Kaplan Fund’s executive
director, according to the same 2010 financial filing.

In 2016 the market value of J.M. Kaplan Fund’s assets still
exceeded $130 million, including the over $97 million it invested in hedge funds,
according to its 2016 Form 990 financial filing. From its investments in the
stocks and bonds of corporation and governments that still exploit
working-class people and middle-class consumers around the globe, the J.M.
Kaplan Fund received over $1.8 million in dividends and interests in 2016.
According to the same 2016 financial filing, the market value of J.M. Kaplan
Fund’s investment in the Brandywine Mutual Strategy hedge fund exceeded $54
million and the market value of its investment in the Brandywine Global hedge
fund was over $35 million in 2016; and, in that same year, J.M. Kaplan Fund
paid the Brandywine Management Company stock and bonds speculation firm
$563,934 for its “investment services” on behalf of the “non-profit”
foundation.

Since the J.M. Kaplan Fund gave a $10,000 grant to Pacifica
in 1998, Brandywine Management Company/Brandywine Global Inc. has been a
subsidiary of Legg Mason Inc., that, with its 9 subsidiary investment
affiliates managed over $779 billion worth of assets in early 2018, including
over $216 billion worth of stock in corporations that exploit workers and
middle-class consumers around the world. As the Brandywine Global website
notes:

“Brandywine Global
incorporated in 1986 as Brandywine Asset Management, LLC….In January 1998, Legg
Mason, Inc., a New York Stock Exchange-listed company which has been providing
investment services to institutions and individuals since 1899, acquired
Brandywine Asset Management…. “

In late 2017, over $74 billion in corporate stocks, corporate
bonds, corporate senior notes and government bonds were being managed by
Brandywine Global; and in late December 2017, $7.4 million worth of Apple
stock, $7.4 million worth of JP Morgan Chase stock, $7.2 million worth of
Citigroup stock, $6.3 million worth of Disney/ABC corporate media conglomerate
stock, $6.3 million worth of Comcast corporate media conglomerate stock, $4.4
million worth of United Technologies stock, $3.9 million worth of Goldman Sachs
stock, $3.9 million worth of Lockheed Martin stock, $2.7 million worth of
General Dynamics stock, $2.4 million worth of Exxon Mobil stock, $2 million
worth of Chevron stock and $2.1 million worth of CBS corporate media
conglomerate stock were contained in the stock portfolio that provides
“investment services” for the J.M. Kaplan Fund which helped fund Democracy
Now! in 1997 and 1998. (end of part 8)